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Order Code RS22424Updated May 19, 2006CR8 Report for CongressReceived through the CRS WebArab League Boycott of IsraelMartin A. WeissAnalyst in International Trade and FinanceForeign Affairs, Defense, and Trade DivisionSummaryThe Arab League has maintained an official boycott of Israeli companies andIsraeli-made goods since the founding of Israel in 1948. The United States activelyopposes the boycott and works on both bilateral and multilateral fronts to end it. TheU.S. government also enforces laws that prohibit U.S. firms from participating in theboycott. This report will be updated as events warrant.The Arab League is an umbrella organization comprising 23 Middle Eastern andAfrican countries and entities.' The League was founded in 1944, and in 1945 began aboycott of Zionist goods and services in the British mandate territory of Palestine. In1948, following the war establishing Israel's independence, the boycott was formalizedagainst the state of Israel and broadened to include non-Israelis who maintain economicrelations with Israel or who are perceived to support it. The boycott is administered bythe Damascus-based Central Boycott Office (CBO), a specialized bureau of the ArabLeague.The U.S. government has often been at the forefront of international efforts to endenforcement of the boycott and to seek the Arab League's revocation of it. U.S.legislative action related to the boycott dates from 1959 and includes multiple statutoryprovisions expressing U.S. opposition to the boycott, usually in foreign assistancelegislation. In 1965, mandatory reporting of any requests for U.S. companies toparticipate in the boycott was adopted. In 1977, Congress passed laws making it illegalfor U.S. companies to cooperate with the boycott and authorizing the imposition of civiland criminal penalties against U.S. violators. In addition, taxpayers who cooperate withthe boycott are subject to the loss of tax benefits that the U.S. government provides toexporters. U.S. regulations define cooperating with the boycott as: (1) agreeing to oractually refusing to do business in Israel or with a blacklisted company; (2) agreeing toor actually discriminating against other persons based on race, religion, sex, nationalorigin or nationality; (3) agreeing to or actually furnishing information about businessMembers are: Egypt, Iraq, Jordan, Lebanon, Saudi Arabia, Syria, Yemen, Libya, Sudan,Morocco, Tunisia, Kuwait, Algeria, United Arab Emirates, Bahrain, Qatar, Oman, Mauritania,Somalia, Palestinian Authority, Djibouti, and Comoros. In 2003, Eritrea joined the Arab Leagueas an observer.Congressional Research Service + The Library of Congress